Comments on Links for 12-29-2012TypePad2012-12-29T07:22:25ZMark Thomahttp://economistsview.typepad.com/economistsview/tag:typepad.com,2003:http://economistsview.typepad.com/economistsview/2012/12/links-for-12-29-2012/comments/atom.xml/anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c83ba6970d2012-12-30T22:17:19Z2012-12-30T22:17:19Zanne“Models do not just predict, but they can make things happen,” says Ms. Schutt, who taught a data science course...<p>“Models do not just predict, but they can make things happen,” says Ms. Schutt, who taught a data science course this year at Columbia. “That’s not discussed generally in our field.”</p>
<p>-- Steve Lohr</p>
<p>A feedback loop occurs when we (humans) adapt our behavior to the filtered view of reality presented by the machines.</p>
<p>-- Julio</p>
<p>[ Nice and promising. ]</p>Julio commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c83057970d2012-12-30T22:10:03Z2013-02-05T16:23:31ZJuliohttp://profile.typepad.com/juliokThanks, very interesting. The most interesting aspect of the issue is addressed in the last part, beginning with “Models do...<p>Thanks, very interesting.<br />
The most interesting aspect of the issue is addressed in the last part, beginning with</p>
<p>“Models do not just predict, but they can make things happen,” says Ms. Schutt, who taught a data science course this year at Columbia. “That’s not discussed generally in our field.”</p>
<p>A feedback loop occurs when we (humans) adapt our behavior to the filtered view of reality presented by the machines.</p>Julio commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c35244bde970b2012-12-30T20:42:38Z2013-02-05T16:23:31ZJuliohttp://profile.typepad.com/juliokSorry, should have used a smiley on this one. I looked at " 37.4% blame the Republicans" and figured out...<p>Sorry, should have used a smiley on this one. I looked at &quot; 37.4% blame the Republicans&quot; and figured out how Fox would spin that number.</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f5225b3970c2012-12-30T18:01:13Z2012-12-30T18:01:13ZanneDishonest Abe? [ Too, too clever. ]<p>Dishonest Abe?</p>
<p>[ Too, too clever. ]</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c3521fa00970b2012-12-30T13:29:10Z2012-12-30T13:29:10ZDarryl FKA RonNeil Young is great, but his buddy Steven Stills is even greater IMHO.<p>Neil Young is great, but his buddy Steven Stills is even greater IMHO.</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f50bd6b970c2012-12-30T13:26:47Z2012-12-30T13:26:47ZDarryl FKA RonI meant to say that the capital gains tax and dividend are the same thing. [As long as they are...<p>I meant to say that the capital gains tax and dividend are the same thing. </p>
<p>[As long as they are treated as the same thing then we will continue to get less internal investment compared to consolidation of equity and wealth, speculative trading in equities, commondity futures, and derivatives. However, Heritage Foundation and Robert Mundell are on your side with regards to preserving the capital gains preference over dividends and interest income, so you are in good company in a manner of speaking. It&#39;s not my manner of speaking, but it has worked well to fool liberals for nearly sixty years. Clearly the conservatives prefer lower tax rates on capital, but that is secondary to the differential between taxes on windfalls and income over time.]</p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4fd855970c2012-12-30T10:18:05Z2012-12-30T10:18:05ZMikeI am hardly a gentlemen, but I will leave you with this song. http://www.youtube.com/watch?v=bv6kwG4BhC8<p>I am hardly a gentlemen, but I will leave you with this song.<br />
<a href="http://www.youtube.com/watch?v=bv6kwG4BhC8" rel="nofollow">http://www.youtube.com/watch?v=bv6kwG4BhC8</a></p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c452b0970d2012-12-30T09:53:03Z2012-12-30T09:53:03ZMikeI meant to say that the capital gains tax and dividend are the same thing. I don't believe that passive...<p>I meant to say that the capital gains tax and dividend are the same thing. </p>
<p>I don&#39;t believe that passive income should be taxed at a lower rate than someone who sweats for a living. </p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c44ffa970d2012-12-30T09:50:38Z2012-12-30T09:50:38ZMikeI never been a fan of game theory. I see it as a tool to beef up short term profits...<p>I never been a fan of game theory. I see it as a tool to beef up short term profits at long run expense. </p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c3520cb12970b2012-12-30T09:15:53Z2012-12-30T09:15:53ZMikeEconomists are pussies and believe that efficiency drives society. After all, it excuses them from confrontation. However, equity matters. It...<p>Economists are pussies and believe that efficiency drives society. After all, it excuses them from confrontation. </p>
<p>However, equity matters. It also plays a crucial role into efficiency. </p>
<p>Humans value fairness and when they live in a fair society, they are more productive. </p>
<p>This idea that bailing out bankers and cutting SS is supposed to be good for society is absolutely mind fucking blowing.</p>im1dc commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351e6451970b2012-12-30T00:25:11Z2012-12-30T00:25:11Zim1dcMankiw like you've never seen him, telling the truth about taxes -- for a change. http://www.businessinsider.com/former-romney-advisor-greg-mankiw-says-middle-tax-rates-may-need-to-rise-2012-12 "FORMER ROMNEY ECONOMIC ADVISOR:...<p>Mankiw like you&#39;ve never seen him, telling the truth about taxes -- for a change.</p>
<p><a href="http://www.businessinsider.com/former-romney-advisor-greg-mankiw-says-middle-tax-rates-may-need-to-rise-2012-12" rel="nofollow">http://www.businessinsider.com/former-romney-advisor-greg-mankiw-says-middle-tax-rates-may-need-to-rise-2012-12</a></p>
<p>&quot;FORMER ROMNEY ECONOMIC ADVISOR: Yes, Middle Class Tax Rates Might Have To Be Hiked Too&quot;</p>
<p>Joe Weisenthal... Dec. 29, 2012, 4:11 PM</p>
<p>&quot;Former Mitt Romney economic advisor Greg Mankiw admits something that he probably would never have said during the campaign: Middle class tax rates can&#39;t be set in stone. They might have to rise, too.</p>
<p>In a column at the NYT, Mankiw argues that if we&#39;re going to get real about connecting spending to revenue, and if we want to keep (for the most part) the level of entitlements we&#39;ve come to expect, some kind of tax increase on the middle class will be necessary.</p>
<p>.....&quot;Ultimately, unless we scale back entitlement programs far more than anyone in Washington is now seriously considering, we will have no choice but to increase taxes on a vast majority of Americans. This could involve higher tax rates or an elimination of popular deductions. Or it could mean an entirely new tax, such as a value-added tax or a carbon tax.&quot;</p>
<p>In making this argument, Mankiw also pushes back on the argument that the current tax code lacks sufficient progressivity. As we pointed out earlier this week, the main reason liberals want to raise taxes on the rich is not that it will make a huge dent in the deficit (it won&#39;t), but that higher taxes on the rich are a partial corrective to extreme income inequality. Mankiw isn&#39;t buying that:</p>
<p>.....&quot;In 2009, the most recent year for which data are available, the richest 1 percent of Americans paid 28.9 percent of their income in federal taxes, according to the Congressional Budget Office. (That includes income taxes, both individual and corporate, and payroll taxes.) Members of the middle class, defined as the middle fifth of households, paid 11.1 percent of their income in taxes.&quot;</p>
<p>...</p>
<p>.....&quot;These data suggest that the rich are not, as a general matter, shirking their responsibilities to support the federal government. To me, the current tax system looks plenty progressive. Others may disagree.&quot;</p>
<p>Bottom line is that although Mankiw&#39;s point initially seems unconservative (taxes might need to rise!) it&#39;s certainly in keeping with the opposition to more tax code progressivity, or using the tax code as an inequality corrective.&quot;</p>im1dc commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c1b8d9970d2012-12-30T00:17:31Z2012-12-30T00:17:31Zim1dcOh my, we didn't hear about this during the campaign. Medicare inflation is trending DOWN http://www.businessinsider.com/peter-orszag-chart-shows-medicare-costs-slowing-2012-12 "Peter Orszag's Chart Of...<p>Oh my, we didn&#39;t hear about this during the campaign. Medicare inflation is trending DOWN</p>
<p><a href="http://www.businessinsider.com/peter-orszag-chart-shows-medicare-costs-slowing-2012-12" rel="nofollow">http://www.businessinsider.com/peter-orszag-chart-shows-medicare-costs-slowing-2012-12</a></p>
<p>&quot;Peter Orszag&#39;s Chart Of The Year Could Change Everything You Think About Healthcare And The Federal Budget&quot;</p>
<p>by Joe Weisenthal... Dec. 29, 2012</p>
<p>&quot;The conventional wisdom on the deficit is: Right now the deficit doesn&#39;t pose a problem, but thanks to the gigantic growth in healthcare costs, it&#39;s inevitable that the government will get swamped by Medicare spending, ergo we need to tweak the system.</p>
<p>Peter Orszag, who was the head of the Office of Management and Budget under Obama, and who is now at Citi, offers up a chart that could be a Medicare costs game-changer.</p>
<p>His chart of the year is found in Wonkblog&#39;s annual awesome The Year In Graphs feature, which everyone should check out.</p>
<p>The chart is taken from S&amp;P&#39;s twice-per-year deep dive into healthcare inflation, and it shows that contrary to expectations, Medicare inflation (the annual year over year growth in the cost of a delivering a unit of care) is slowing dramatically, and is well below almost every other category of healthcare spending (which are also dropping).</p>
<p>Click to enlarge the chart, the Medicare inflation index is the bottom dashed line.&quot; [At link]</p>im1dc commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4d1434970c2012-12-30T00:09:18Z2012-12-30T00:09:18Zim1dcIt is 7 P.M. EST and according to NBCnews the Republicans continue to play politics with the Fiscal Cliff by...<p>It is 7 P.M. EST and according to NBCnews the Republicans continue to play politics with the Fiscal Cliff by refusing to negotiate in good faith to keep taxes from going up on the 98% by refusing to allow taxes to go up on the top 2%.</p>
<p>Losers!</p>
<p>Going over the fiscal cliff gets rid of the bush tax cuts and that may heal the nation&#39;s ills more than any other single thing this President and Congress can do, imo.</p>
<p>Grover Norquist wants to &#39;starve the beast&#39; by denying the FedGovt tax revenue, so by reversing that insanity with the elimination of the bush tax cuts we rid our nation of that rude black mark and those who pushed it on us once and for all. Good riddance I say. Push them into oblivion. </p>im1dc commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c19e47970d2012-12-29T23:56:03Z2012-12-29T23:56:03Zim1dcJulio, what are you looking at? Here are the results as of 6:53P.M. EST Total of 98,753 votes - 15.1%...<p>Julio, what are you looking at? </p>
<p>Here are the results as of 6:53P.M. EST</p>
<p>Total of 98,753 votes -</p>
<p>15.1% President Obama<br />
14,918 votes</p>
<p>40.6% Republicans on Capitol Hill<br />
40,118 votes</p>
<p>2.2% Democrats on Capitol Hill<br />
2,161 votes</p>
<p>41.6% All of the above<br />
41,089 votes</p>
<p>0.5% None of the above<br />
467 votes<br />
==========================================</p>
<p>It seems the Republicans and FOXNews have been busy upping Obama&#39;s negatives but still overall the Republicans are taking a major drubbing.<br />
</p>Matt Young commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c0adc5970d2012-12-29T20:58:41Z2012-12-29T20:58:41ZMatt Young•How Do We Know Nash Equilibrium Has “Arrived”? - Cheap Talk ------------- Nash works, but the equilibrium happened months ago....<p>•How Do We Know Nash Equilibrium Has “Arrived”? - Cheap Talk<br />
-------------</p>
<p>Nash works, but the equilibrium happened months ago. The median states opted for the nominal GDP target we had, 2.1%, and the fiscal cliff they negotiated. They are not budging. All the parties know this, the median state wins the equilibrium because they have the median proportional representation, they are the democrats (small d)..<br />
</p>Julio commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351d2e79970b2012-12-29T20:36:54Z2013-02-05T16:23:31ZJuliohttp://profile.typepad.com/juliokDishonest Abe?<p>Dishonest Abe?</p>Julio commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4bf2a5970c2012-12-29T20:35:24Z2013-02-05T16:23:31ZJuliohttp://profile.typepad.com/juliokThis just in: 62.6% of public blames Democrats for our problems.<p>This just in: 62.6% of public blames Democrats for our problems.</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c088d3970d2012-12-29T20:33:56Z2012-12-29T20:33:56ZanneJulio, in response to the different way in machines and actual people play chess: http://www.nytimes.com/2012/12/30/technology/big-data-is-great-but-dont-forget-intuition.html December 29, 2012 Sure, Big...<p>Julio, in response to the different way in machines and actual people play chess:</p>
<p><a href="http://www.nytimes.com/2012/12/30/technology/big-data-is-great-but-dont-forget-intuition.html" rel="nofollow">http://www.nytimes.com/2012/12/30/technology/big-data-is-great-but-dont-forget-intuition.html</a></p>
<p>December 29, 2012</p>
<p>Sure, Big Data Is Great. But So Is Intuition<br />
By STEVE LOHR</p>
<p>IT was the bold title of a conference this month at the Massachusetts Institute of Technology, and of a widely read article in The Harvard Business Review last October: “Big Data: The Management Revolution.”</p>
<p>Andrew McAfee, principal research scientist at the M.I.T. Center for Digital Business, led off the conference by saying that Big Data would be “the next big chapter of our business history.” Next on stage was Erik Brynjolfsson, a professor and director of the M.I.T. center and a co-author of the article with Dr. McAfee. Big Data, said Professor Brynjolfsson, will “replace ideas, paradigms, organizations and ways of thinking about the world.”</p>
<p>These drumroll claims rest on the premise that data like Web-browsing trails, sensor signals, GPS tracking, and social network messages will open the door to measuring and monitoring people and machines as never before. And by setting clever computer algorithms loose on the data troves, you can predict behavior of all kinds: shopping, dating and voting, for example.</p>
<p>The results, according to technologists and business executives, will be a smarter world, with more efficient companies, better-served consumers and superior decisions guided by data and analysis.</p>
<p>I’ve written about what is now being called Big Data a fair bit over the years, and I think it’s a powerful tool and an unstoppable trend. But a year-end column, I thought, might be a time for reflection, questions and qualms about this technology....</p>Julio commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c08606970d2012-12-29T20:31:51Z2012-12-29T20:31:51ZJuliohttp://profile.typepad.com/juliokSomething about babies being born to save us. Sure I heard that somewhere recently.<p>Something about babies being born to save us. Sure I heard that somewhere recently.</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4be8e8970c2012-12-29T20:28:48Z2012-12-29T20:28:48ZDarryl FKA RonHowever, thanks! I now give Krugman more credit than before, but I will still hold out on the IMF. They...<p>However, thanks! I now give Krugman more credit than before, but I will still hold out on the IMF. They have been resisting pressure by some good developmental/institutional economists (e.g., Ha-Joon Chang) for quite a while and seemed to have turned some borerline economists more neoliberal (e.g., William S. Milberg).</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351d1946970b2012-12-29T20:23:56Z2012-12-29T20:23:56Zannehttp://www.nytimes.com/2012/12/30/world/asia/deadly-bite-of-winter-returns-to-ill-prepared-refugee-camps-of-kabul.html December 30, 2012 Winter’s Bite Returns to Refugee Camps of Kabul By ROD NORDLAND Stubbornness by the Afghan government...<p><a href="http://www.nytimes.com/2012/12/30/world/asia/deadly-bite-of-winter-returns-to-ill-prepared-refugee-camps-of-kabul.html" rel="nofollow">http://www.nytimes.com/2012/12/30/world/asia/deadly-bite-of-winter-returns-to-ill-prepared-refugee-camps-of-kabul.html</a></p>
<p>December 30, 2012</p>
<p>Winter’s Bite Returns to Refugee Camps of Kabul<br />
By ROD NORDLAND </p>
<p>Stubbornness by the Afghan government and the refugees themselves, in addition to adequate deliveries of aid, poses a challenge for those living in camps. </p>
<p>[ Will another 10 years of America waging war in Afghanistan be the answer? ]</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c06cfa970d2012-12-29T20:16:45Z2012-12-29T20:16:45ZDarryl FKA RonIt would cost the 1% a lot more to raise the global 99% all out of poverty than it does...<p>It would cost the 1% a lot more to raise the global 99% all out of poverty than it does to lower the global 99% all down into relative poverty. And of course the debt peonage and low wage exploitation opportunities are endless this latter way.</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c06788970d2012-12-29T20:13:45Z2012-12-29T20:13:45ZDarryl FKA RonAll part of the great embryonic journey towards global wage arbitrage and equality. It's much quicker to lower the ceiling...<p>All part of the great embryonic journey towards global wage arbitrage and equality. It&#39;s much quicker to lower the ceiling than to raise the floor. Investors and corporate management can get all they want through skimming and the rest of us can just take it or stare at our navels while extolling vacant fantansies with empty words.</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351cf917970b2012-12-29T20:06:15Z2012-12-29T20:06:15ZanneNice, nice analysis but I caution never taking policy intimations or announcements by the Japanese government as actually going to...<p>Nice, nice analysis but I caution never taking policy intimations or announcements by the Japanese government as actually going to be implemented till they are implemented and completely so. Analysts who know Japan, never ever take government announcements as indicative of policy that will actually be carried through.</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6c04d61970d2012-12-29T19:59:55Z2012-12-29T19:59:55ZanneAs for Hong Kong, there was always the implication that China could intervene to protect the Hong Kong dollar which...<p>As for Hong Kong, there was always the implication that China could intervene to protect the Hong Kong dollar which is pegged to the United States dollar but control of stock prices as the government bought the Hong Kong stock market index immediately stabilized the market and took pressure of the Hong Kong dollar so that the government, there is actually a currency board in Hong Kong, did not have to raise interest rates to protect the currency.</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4bae21970c2012-12-29T19:56:49Z2012-12-29T19:56:49ZanneThere were 2 important moves against International Monetary Fund wishes or attempted dictates in the wake of the Asian currency...<p>There were 2 important moves against International Monetary Fund wishes or attempted dictates in the wake of the Asian currency crisis of 1997. There was the use of capital controls by Malaysia to limit speculative currency flows from the country and there was the support of the Hong Kong stock market by the island government, a support that was sorely regretted by Milton Friedman but that was again quite successful in allowing speculation against the Hong Kong market.</p>
<p>Malaysian capital control was however most objected to by Western analysts.</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4b9fe4970c2012-12-29T19:48:02Z2012-12-29T19:48:02ZanneTerrific, I would never have known of this important article if not for this post: http://www.slate.com/articles/business/the_dismal_science/1999/09/capital_control_freaks.html September 27, 1999 Capital...<p>Terrific, I would never have known of this important article if not for this post:</p>
<p><a href="http://www.slate.com/articles/business/the_dismal_science/1999/09/capital_control_freaks.html" rel="nofollow">http://www.slate.com/articles/business/the_dismal_science/1999/09/capital_control_freaks.html</a></p>
<p>September 27, 1999</p>
<p>Capital Control Freaks<br />
How Malaysia got away with economic heresy.<br />
By Paul Krugman</p>
<p>I didn&#39;t want to go to Malaysia. The Malaysian government would surely expect me to deliver a stronger endorsement of its heterodox economic program than I was prepared to offer. And, of course, it would try to use me politically--to provide a veneer of respectability to a regime that has lately developed the habit of putting inconvenient people in jail. But sometimes an economist has to do what an economist has to do. Since I had been the only high-profile economist to advocate the economic heresy that Malaysia had put into practice, sooner or later I would have to face the music. And so last month I agreed to spend a day--including a 90-minute &quot;dialogue&quot; with the prime minister--at the Palace of the Golden Horses, a vaguely Las Vegas-style resort outside Kuala Lumpur.</p>
<p>Some background here: Malaysian Prime Minister Mahathir Mohamad has been the wild man of the Asian crisis, blaming all his problems on manipulations by Jewish speculators, denouncing the prescriptions of the International Monetary Fund as part of a Western conspiracy to recolonize Asia, and so on. In the early days of the crisis, his position seemed absurd, and it was easy to make fun of him--which I did, right here in Slate. But eventually it stopped being so easy to dismiss Mahathir&#39;s views. For one thing, the crisis turned out to be worse than anyone had imagined possible, and anyone with an open mind began to suspect that the IMF&#39;s initial policies had been misconceived. For another, while the vast conspiracy Mahathir envisaged was a figment of his imagination (I know the supposed conspirators, and they aren&#39;t that smart), a few hedge funds really did engage in concerted manipulation of Hong Kong&#39;s markets in the summer of 1998. Mahathir still has a distorted view of the way the world works--more on that below--but then so do the free-capital-market faithful.</p>
<p>Where do I fit in? ...</p>Peter K. commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4b94c5970c2012-12-29T19:40:55Z2012-12-29T19:40:55ZPeter K.http://www.negativeoutlook.blogspot.comYglesias and Smith should have a friendly wager like http://delong.typepad.com/sdj/2012/12/coffee-with-stephanie-kelton.html What would the terms of the bet be? How high...<p>Yglesias and Smith should have a friendly wager like</p>
<p><a href="http://delong.typepad.com/sdj/2012/12/coffee-with-stephanie-kelton.html" rel="nofollow">http://delong.typepad.com/sdj/2012/12/coffee-with-stephanie-kelton.html</a></p>
<p>What would the terms of the bet be? How high would inflation expectation needs to get by what date?</p>Mark A. Sadowski commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351c54de970b2012-12-29T18:23:15Z2012-12-29T18:23:15ZMark A. Sadowskihttp://marketmonetarist.com/2012/12/29/guest-post-cantillon-and-central-banking-by-justin-merrill/ December 29, 2012 Guest post: Cantillon and Central Banking By Justin Merrill "...But are the Market Monetarists right that...<p><a href="http://marketmonetarist.com/2012/12/29/guest-post-cantillon-and-central-banking-by-justin-merrill/" rel="nofollow">http://marketmonetarist.com/2012/12/29/guest-post-cantillon-and-central-banking-by-justin-merrill/</a></p>
<p>December 29, 2012</p>
<p>Guest post: Cantillon and Central Banking <br />
By Justin Merrill</p>
<p>&quot;...But are the Market Monetarists right that there are not Cantillon effects from open market operations since primary dealers are selling bonds to buy reserves? Not quite. The primary dealers do benefit by getting the privilege of selling securities at a premium to the market rate and buying at a discount. The gain might be small, but it exists; otherwise PDs would not have an incentive to participate in OMOs. This is effectively a risk free arbitrage that doesn’t arise out of entrepreneurial awareness, but political connectedness and size. Libertarians may overstate the size of this privilege, but it shouldn’t be ignored. Interest paid on reserves to banks and Federal Reserve profits turned over to the US Treasury are also direct injections of new money. The total amount is roughly $100 bil a year (Fed’s reported profits plus its deposit liabilities times .25%), not including the unknown arbitrage gains that PDs make from trading.<br />
<br />
Imagine that we are on a gold standard and the price of gold is $1,000/oz. A gold miner may have a cost of production of $990/oz. He therefore earns $10 of purchasing power by adding to the outside money supply.<br />
<br />
Now imagine that in our current system a PD buys a security for $990 and sells it to the Fed for $1,000, he also earns $10 of purchasing power.<br />
<br />
In both cases of base money expansion, there are Cantillon effects, but the second one is largely due to legal privilege. Once the outside money enters the banking system, there are secondary Cantillon effects. Banks’ cost of capital is lowered, increasing their profit margins. They may increase their investments, benefiting prior holders of said investments, or they may increase their lending, putting new money in the hands of the borrower and shortly into the hands of the person selling the financed asset.<br />
<br />
The way that monetary policy transmits can be difficult to predict through the credit channels. Different firms have varying access to capital markets. Small businesses rely on bank and trade credit, while large firms may be able to issue commercial paper at extremely low rates. In a credit crunch, small firms will be cut off from credit even if the Fed is aggressive with monetary policy. The beneficiaries, relatively speaking, will be primary dealers and issuers of commercial paper that can borrow near zero and lend through trade credit at high rates of interest.<br />
<br />
This is one reason I am skeptical of NGDP targeting. I do not think output and asset prices can be kept in equilibrium through central banking. Even though I prefer NGDP targeting to inflation targeting, I think stable NGDP is a probable outcome of monetary equilibrium, not an end in itself. The transmission mechanism between reserve creation and output and inflation is messy and unpredictable...&quot;</p>Mark A. Sadowski commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bfae71970d2012-12-29T18:17:24Z2012-12-29T18:17:24ZMark A. Sadowskihttp://monetaryfreedom-billwoolsey.blogspot.com/2012/12/andolfatto-on-taylor-rules.html December 29, 2012 Andolfatto on Taylor Rules By Mayor Bill Woolsey "...In my view, an important part of our...<p><a href="http://monetaryfreedom-billwoolsey.blogspot.com/2012/12/andolfatto-on-taylor-rules.html" rel="nofollow">http://monetaryfreedom-billwoolsey.blogspot.com/2012/12/andolfatto-on-taylor-rules.html</a></p>
<p>December 29, 2012</p>
<p>Andolfatto on Taylor Rules <br />
By Mayor Bill Woolsey</p>
<p>&quot;...In my view, an important part of our current problem is a failure of markets for short and safe (mostly government guaranteed) debt to clear properly. Negative nominal yields are necessary on some financial assets. In my view, the first best answer isn&#39;t a higher inflation rate, but rather getting government out of the business of issuing of hand-to-hand currency. If the nominal and real yields on &quot;government bonds&quot; can always adjust enough to clear, then households and firms will switch to funding capital goods.</p>
<p>Still, for the U.S. economy, it seems to me that these problems will show up as an increase in current consumption and a decrease in investment. Those already holding government bonds would earn real capital gains until they felt wealthy enough to expand their real consumption. However, investment and capital accumulation would be less, so productive capacity would shift to a lower growth path. </p>
<p>I don&#39;t think that the U.S. economy is in this situation. Real consumption has not recovered to the growth path of the Great Moderation. Still, I am pleased that Andolfatto is seeing some problems with this fixation on the &quot;Friedman rule&quot; of deflation equal to the negative of the real interest rate. Sure, it is great for those holding money to have a risk-free, perfectly liquid asset that pays the real equilibrium interest rate. But does it make sense to pay them any interest if they are not providing resources to fund real investment and expand the production of consumer goods in the future? Pay positive nominal interest rates on money, reflecting the actual risks (both in terms of failure of investment products and duration) for actual funding investment in capital goods. </p>
<p>Currency? Currency! Quit making the tail wag the dog. Yes, it is useful for a limited set of transactions. But don&#39;t make it the center of the economic universe and require everything else to accomodate it.&quot;</p>Mark A. Sadowski commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bfa4af970d2012-12-29T18:10:29Z2012-12-29T18:10:29ZMark A. Sadowskihttp://thefaintofheart.wordpress.com/2012/12/29/david-altig-is-also-skeptical/ December 29, 2012 David Altig is also skeptical By Marcus Nunes "According to David Altig: http://macroblog.typepad.com/macroblog/2012/12/nominal-gdp-targeting-still-a-skeptic.html "What if, rather...<p><a href="http://thefaintofheart.wordpress.com/2012/12/29/david-altig-is-also-skeptical/" rel="nofollow">http://thefaintofheart.wordpress.com/2012/12/29/david-altig-is-also-skeptical/</a></p>
<p>December 29, 2012</p>
<p>David Altig is also skeptical<br />
By Marcus Nunes</p>
<p>&quot;According to David Altig:<br />
<br />
<a href="http://macroblog.typepad.com/macroblog/2012/12/nominal-gdp-targeting-still-a-skeptic.html" rel="nofollow">http://macroblog.typepad.com/macroblog/2012/12/nominal-gdp-targeting-still-a-skeptic.html</a></p>
<p>&quot;What if, rather than some measure of nominal GDP, the 2004–06 Fed had instead been solely focused on the inflation rate? You can’t answer that question without operationalizing what it means to be “focused on the inflation rate,” but for the sake of argument let’s simply consider actual annualized PCE inflation over a two-year horizon. (In his press statementexplaining the Federal Open Market Committee’s (FOMC) latest decision, Fed Chairman Ben Bernanke suggested using a one- to two-year horizon for inflation forecasting horizon to smooth through purely transitory influences on inflation that the central bank would inclined to “look through.”) Here’s the record, with the period from 2004 through 2006 highlighted:</p>
<p><a href="http://thefaintofheart.files.wordpress.com/2012/12/altig-ngdplt_0.png" rel="nofollow">http://thefaintofheart.files.wordpress.com/2012/12/altig-ngdplt_0.png</a></p>
<p>If you really do think that there was a policy mistake over the 2004–06 period—and in particular if you believe the FOMC during that should have adopted a more restrictive policy stance—I’m hard-pressed to see what advantage is offered by focusing on nominal GDP rather than inflation alone. In fact, you could argue that that the GDP part of the nominal GDP target would have added just about nothing to the discussion.&quot;<br />
<br />
Lo and behold, Mr. Altig. Focusing on NGDP makes all the difference as an adaptation to your chart, including both the same calculation for the Core PCE and the estimate of the NGDP gap, indicates.</p>
<p><a href="http://thefaintofheart.files.wordpress.com/2012/12/altig-ngdplt.png" rel="nofollow">http://thefaintofheart.files.wordpress.com/2012/12/altig-ngdplt.png</a></p>
<p>In the 2004-06 period monetary policy was “geared” to take nominal spending back to trend, which it succeeded in doing by the end of Greenspan´s tenure. The difference to Bernanke in 2007-08 was that Greenspan didn´t make monetary policy a “slave” of Headline inflation. By focusing on oil and commodity price increases in 2007-08 Bernanke “punched” nominal spending “right in the nose”. The “bleeding” was copious!&quot;</p>Mark A. Sadowski commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351c39e4970b2012-12-29T18:04:03Z2012-12-29T18:04:03ZMark A. Sadowskihttp://thefaintofheart.wordpress.com/2012/12/28/noah-is-skeptical/ December 28, 2012 Noah is skeptical By Marcus Nunes "Noahpinion has a laugh at the expense of MMs who...<p><a href="http://thefaintofheart.wordpress.com/2012/12/28/noah-is-skeptical/" rel="nofollow">http://thefaintofheart.wordpress.com/2012/12/28/noah-is-skeptical/</a></p>
<p>December 28, 2012</p>
<p>Noah is skeptical<br />
By Marcus Nunes</p>
<p>&quot;Noahpinion has a laugh at the expense of MMs who think Abe could make a diference in Japan.<br />
<br />
According to Noah.</p>
<p><a href="http://noahpinionblog.blogspot.com/2012/12/trust-not-in-shinzo-abe-ye-monetarists.html" rel="nofollow">http://noahpinionblog.blogspot.com/2012/12/trust-not-in-shinzo-abe-ye-monetarists.html</a> </p>
<p>&quot;Abe is mainly interested in social and cultural issues. He is the Japanese style of socio-cultural conservative, sort of a Newt Gingrich type . As prime minister in 2006-7, he enacted a law requiring public schools to teach “patriotism”, mounted a vigorous denial of Japan’s WW2 “comfort women” sex-slavery, gave gifts to the nationalist Yasukuni Shrine (angering China), and pushed to de-emphasize Japan’s WW2 war guilt in school textbooks. His lifelong quest has been the revision of Japan’s “pacifist” constitution to allow Japan to have a normal military.<br />
<br />
I of course don’t mean to imply that Abe’s cultural conservatism makes him unlikely to experiment with monetary policy (unlike in America, in Japan “hard money” is less of a conservative sacred cow). Instead, what I mean is that Abe really just does not care very much at all about the economy. I mean, of course he wants Japan to be strong, and of course he doesn’t want his party kicked out of power. But his overwhelming priority is erasing the legacy of World War 2, with the economy a distant, distant second.&quot;<br />
<br />
And he may well be right, although we should not forget Bernanke s own about face since becoming Fed Chairman! But what is very wrong in Noah s post is the claim that<br />
<br />
&quot;The LDP, which thrived in the 60s, 70s, and 80s, has always been a mercantilist outfit, *weakening the currency to pump up exports*, using the surplus from exports to support Japan’s corporatist social model in the so-called “two-tiered economy”. In Japan’s days as a high-quality low-cost export powerhouse, this worked marvelously and kept everyone happy, allowing the LDP to keep power for generations. The recent strength of the yen, however, has been looking like the final nail in that system’s coffin.&quot;<br />
<br />
Just before the end of Bretton Woods in the early 1970s, the Yen was 360 to the dollar. Three months ago it bottomed at 75. Now it s at 83. In all those decades there was only a brief 3 year period – 1995 to 1998 – that the Yen, like every other currency, depreciated againt the dollar, driven by high productivity growth in the US and flight to safety from crises in Asia and Russia. So, if they have tried to weaken the currency through all those years they were pretty incompetent. Maybe this time it will be different.<br />
<br />
Chart Update:&quot;</p>
<p><a href="http://thefaintofheart.files.wordpress.com/2012/12/yen-usd1.png" rel="nofollow">http://thefaintofheart.files.wordpress.com/2012/12/yen-usd1.png</a></p>Mark A. Sadowski commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bf942a970d2012-12-29T17:59:34Z2012-12-29T17:59:34ZMark A. Sadowskihttp://www.themoneyillusion.com/?p=18350 December 29, 2012 Noah Smith on innocence By Scott Sumner "Here’s a wise old man named Noah Smith: http://noahpinionblog.blogspot.com/2012/12/trust-not-in-shinzo-abe-ye-monetarists.html...<p><a href="http://www.themoneyillusion.com/?p=18350" rel="nofollow">http://www.themoneyillusion.com/?p=18350</a></p>
<p>December 29, 2012</p>
<p>Noah Smith on innocence<br />
By Scott Sumner</p>
<p>&quot;Here’s a wise old man named Noah Smith:</p>
<p><a href="http://noahpinionblog.blogspot.com/2012/12/trust-not-in-shinzo-abe-ye-monetarists.html" rel="nofollow">http://noahpinionblog.blogspot.com/2012/12/trust-not-in-shinzo-abe-ye-monetarists.html</a><br />
<br />
&quot;Monetarists are an innocent lot. American bloggers, op-ed writers, and economists seem quite taken in by Japanese Prime Minister Shinzo Abe’s promise of a grand monetary experiment. Abe is threatening to revoke the Bank of Japan’s independence, forcing those recalcitrant hard-money-loving inflation hawks to set a hard target of 2% inflation or higher. To an American monetarist, this is really Christmas. Finally, we get to actually test the hypothesis that a central bank can hit an inflation target if it really puts its mind to it! Finally, we get to see the ultimate two-men-enter, one-man-leaves doomsday showdown between the immovable object of Japan’s implacable deflation and the irresistible force of Print Money And Buy Stuff!<br />
<br />
But it is not to be. Shinzo Abe is not the Jesus of monetary policy. American monetarists, I feel for you – I would love to see the idea of monetary policy dominance put to a stark test – but I just don’t think it’s going to happen.&quot;<br />
<br />
It would be interesting to know which monetarists Noah is talking about. (The only “innocent” monetarist Noah links to is Matt Yglesias, who is neither innocent nor a monetarist.) Like Noah, I’ve been skeptical of the intentions of the Abe government, noting that bond yields don’t show much sign of inflation expectations. On the other hand the yen has weakened, so there’s likely to be at least a modest change in policy. But I put faith in markets, not politicians.<br />
<br />
Noah continues:<br />
<br />
&quot;You see, unlike most Americans who weren’t watching back in 2006-2007, I remember Shinzo Abe’s first term as PM.&quot;<br />
<br />
Unlike most Americans, so do I. And my hunch is that lots of bloggers have been following Japanese politics since before Noah was born.<br />
<br />
PS. We already know that central banks can hit 2% inflation targets, they’ve been (approximately) doing that for decades.<br />
<br />
PPS. And we already know there is no such thing as liquidity “traps,” the yen wouldn’t have depreciated on Abe’s comments if there were.&quot;</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bf6a39970d2012-12-29T17:27:17Z2012-12-29T17:27:17ZDarryl FKA RonBeware of geeks bearing gifts:<p>Beware of geeks bearing gifts:&lt;)</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4ace86970c2012-12-29T17:24:06Z2012-12-29T17:24:06ZDarryl FKA RonThe IMF came around to view capital controls as no longer heretical [Well, under such limited circumstances that it amounts...<p>The IMF came around to view capital controls as no longer heretical </p>
<p>[Well, under such limited circumstances that it amounts to no change at all with respect to the global economy and globalization. THis is just a retriction on peonage to external owners in emerging economies, an empty symbolic gesture perhaps but more likely just damange control. ]</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bf60f8970d2012-12-29T17:20:15Z2012-12-29T17:20:15Zannehttp://angryarab.blogspot.com/2012/12/western-governments-will-fund-armed.html December 27, 2012 Western governments will fund armed groups in Syria, but not hospitals "Pharmaceutical factories, which used to...<p><a href="http://angryarab.blogspot.com/2012/12/western-governments-will-fund-armed.html" rel="nofollow">http://angryarab.blogspot.com/2012/12/western-governments-will-fund-armed.html</a></p>
<p>December 27, 2012</p>
<p>Western governments will fund armed groups in Syria, but not hospitals</p>
<p>&quot;Pharmaceutical factories, which used to produce more than 90% of the country&#39;s drug needs, are down to one-third of their former production, according to Elizabeth Hoff, the representative of the World Health Organisation in Syria. Many have been destroyed or damaged in the fighting – sometimes directly targeted by the opposition. The northern city of Aleppo, one of the worst affected, was home to most of the factories. Other factories are struggling to import raw materials due to sanctions imposed on Syria by western countries. Insecure routes have affected supply lines. The shortage and price of medicines are just the tip of the iceberg. Fighting has partly or completely destroyed half the country&#39;s 88 public hospitals, with 23 of them not functioning at all. Of 1,919 health centres, 186 have been damaged, and 106 are no longer functional. The UN appeal for humanitarian funding, revised in September, included more than $53m in health-related projects for 2012 – but remains less than one-third funded.&quot; *</p>
<p>* <a href="http://www.guardian.co.uk/global-development/2012/dec/27/syria-health-system-crumbles" rel="nofollow">http://www.guardian.co.uk/global-development/2012/dec/27/syria-health-system-crumbles</a></p>
<p>-- As&#39;ad AbuKhalil </p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bf5f52970d2012-12-29T17:18:52Z2012-12-29T17:18:52Zannehttp://angryarab.blogspot.com/2012/12/the-revolutionary-looters.html December 28, 2012 The revolutionary looters It wasn't the government that killed the Syrian rebel commander Abu Jameel. It...<p><a href="http://angryarab.blogspot.com/2012/12/the-revolutionary-looters.html" rel="nofollow">http://angryarab.blogspot.com/2012/12/the-revolutionary-looters.html</a></p>
<p>December 28, 2012</p>
<p>The revolutionary looters</p>
<p>It wasn&#39;t the government that killed the Syrian rebel commander Abu Jameel. It was the fight for his loot. The motive for his murder lay in a great warehouse in Aleppo which his unit had captured a week before. The building had been full of rolled steel, which was seized by the fighters as spoils of war.</p>
<p>But squabbling developed over who would take the greater share of the loot and a feud developed between commanders. Threats and counter-threats ensued over the following days.<br />
Abu Jameel survived one assassination attempt when his car was fired on. A few days later his enemies attacked again, and this time they were successful. His bullet-riddled body was found, handcuffed, in an alley in the town of al-Bab.</p>
<p>Captain Hussam, of the Aleppo military council, said: &quot;If he had died fighting I would say it was fine, he was a rebel and a mujahid and this is what he had set out to do. But to be killed because of a feud over loot is a disaster for the revolution.</p>
<p>&quot;It is extremely sad. There is not one government institution or warehouse left standing in Aleppo. Everything has been looted. Everything is gone.&quot;</p>
<p>Captured government vehicles and weapons have been crucial to the rebels since the start of the conflict, but according to Hussam and other commanders, and fighters interviewed by the Guardian over a fortnight in northern Syria, a new phase has been reached in the war. Looting has become a way of life.</p>
<p>&quot;Spoils&quot; have now become the main drive for many units as battalion commanders seek to increase their power.</p>
<p>The problem is particularly pronounced in Aleppo, according to Abu Ismael, a young lieutenant from a wealthy family, who ran a successful business before joining the fight against Bashar al-Assad. * </p>
<p>* <a href="http://www.guardian.co.uk/world/2012/dec/27/syrian-rebels-scramble-spoils-war" rel="nofollow">http://www.guardian.co.uk/world/2012/dec/27/syrian-rebels-scramble-spoils-war</a></p>
<p>-- As&#39;ad AbuKhalil</p>anne commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351bfd1f970b2012-12-29T17:18:07Z2012-12-29T17:18:07Zannehttp://angryarab.blogspot.com/2012/12/liberated-syria.html December 29, 2012 "Liberated" Syria The ruined corner of downtown Aleppo does not, of course, constitute a state and...<p><a href="http://angryarab.blogspot.com/2012/12/liberated-syria.html" rel="nofollow">http://angryarab.blogspot.com/2012/12/liberated-syria.html</a></p>
<p>December 29, 2012</p>
<p>&quot;Liberated&quot; Syria</p>
<p>The ruined corner of downtown Aleppo does not, of course, constitute a state and nor does it belong to the man claiming it in his name. But as the Syrian civil war has stagnated and Aleppo has fractured into &quot;liberated&quot; neighbourhoods run by different militias, Abu Ali and commanders like him have become the rulers of a series of mini-fiefdoms. These two blocks of the rebel frontline in Saif al-Dawla are his. *</p>
<p>* <a href="http://www.guardian.co.uk/world/2012/dec/28/aleppo-revolution-abu-ali-sulaibi" rel="nofollow">http://www.guardian.co.uk/world/2012/dec/28/aleppo-revolution-abu-ali-sulaibi</a></p>
<p>-- As&#39;ad AbuKhalil </p>
<p>[ What America has been supporting in Syria. ]</p>Fred C. Dobbs commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bf558a970d2012-12-29T17:11:08Z2012-12-29T17:11:08ZFred C. DobbsJust now, 81k votes: 16.6% Obama, 37.4% Republicans, 2.4% Democrats, 43.1% All-of-the-Above.<p>Just now, 81k votes:<br />
16.6% Obama, 37.4% Republicans,<br />
2.4% Democrats, 43.1% All-of-the-Above.</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351bf41a970b2012-12-29T17:10:56Z2012-12-29T17:10:56ZDarryl FKA RonThis idea of using economics to make the world a better place is wrong. [Actually it depends upon what you...<p>This idea of using economics to make the world a better place is wrong.</p>
<p>[Actually it depends upon what you think a better place is. Probably about 1% of folks more or less in any developed economy and somewhat less in developing economies think the world is about as good a place as it can possibly be. So, mission accomplished. Of course, if we consider how the other 99% is doing then we might have different set of goals. This is where understanding the difference between effectiveness and efficiency come into play. Maximum efficiency of capital with respect to returns and the transformational capacity of consolidation to achieve windfall gains is only effective for the little group of owners and managers that reap the majority of the rewards. Then they also reap the political power to rewrite the rules even more in their own favor. Effectiveness for the 99% is all about full employment and better wages, which work against capital, especially capital windfalls, and minimum prices for goods and services. So, efficiency in the terms or capital and prices will be ineffective in human terms. If you just play Monopoly with your kids a few hundred times then you can figure it out for yourself. The winner is largely decided long before the game is over, but the players keep on playing even though it is clear that they have already lost. So, that is a different take away from game theory than what economists are usually working at. But in any case our lives are just games to them.] </p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bf329a970d2012-12-29T16:41:39Z2012-12-29T16:41:39ZDarryl FKA RonSo, if you follow economic reasoning then we must all be better off if prices are lower, without bothering that...<p>So, if you follow economic reasoning then we must all be better off if prices are lower, without bothering that wages are lower when UE is higher. Displaced workers are just ungrateful Luddites. This is true even if jobs are lost to overseas workers financed by the direct foreign investment of our own capital. When you are convinced of constant economic equilibrium then FOREX must be correctly pricing offshore capital investment and foreign labor arbitrage. The Triffen Dilemna is a feature instead of a bug. The efficiency of capital will always produce pareto optimal results. The economist seeks to eliminate sentimental bias, but does so by introducing a far more limiting bias that confuses certain economic means (e.g., efficiency, capital, and price competition) as ends unto themselves. This is what Ian Mitroff would classify as solving the wrong problems precisely.</p>
<p>Mitroff is good to read if you want to shake out some of that learned ignorance that you get in school.</p>Peter K. commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351bbd61970b2012-12-29T16:27:22Z2012-12-29T16:27:22ZPeter K.http://www.negativeoutlook.blogspot.comMy point is that Abe - like Mohamad before him - is engaging in economic heresy according to neo-liberal strictures....<p>My point is that Abe - like Mohamad before him - is engaging in economic heresy according to neo-liberal strictures. </p>
<p>The IMF came around to view capital controls as no longer heretical and so maybe they will do likewise on helicopter drops during times of depression.</p>Peter K. commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4a8231970c2012-12-29T16:24:00Z2012-12-29T16:24:00ZPeter K.http://www.negativeoutlook.blogspot.comNoah Smith may be right that Shinzo Abe is merely talking down the yen. But as Duy pointed out he's...<p>Noah Smith may be right that Shinzo Abe is merely talking down the yen. </p>
<p>But as Duy pointed out he&#39;s proposing fiscal stimulus financed by the central bank. As I point out he&#39;s replacing the BoJ head with someone who will target 2-3 percent inflation.</p>
<p>Smith seems to arguing that we shouldn&#39;t lionize Abe who is a rightwinger and according to Smith is someone as untrustworthy as Paul Ryan.</p>
<p>Here&#39;s Krugman on Malaysia during the East Asian crisis:</p>
<p><a href="http://www.slate.com/articles/business/the_dismal_science/1999/09/capital_control_freaks.html" rel="nofollow">http://www.slate.com/articles/business/the_dismal_science/1999/09/capital_control_freaks.html</a></p>
<p>&quot;Malaysian Prime Minister Mahathir Mohamad has been the wild man of the Asian crisis, blaming all his problems on manipulations by Jewish speculators, denouncing the prescriptions of the International Monetary Fund as part of a Western conspiracy to recolonize Asia, and so on.&quot;</p>
<p>On the IMF and capital controls:<br />
<a href="http://krugman.blogs.nytimes.com/2012/12/04/the-imf-and-capital-controls/" rel="nofollow">http://krugman.blogs.nytimes.com/2012/12/04/the-imf-and-capital-controls/</a></p>donna commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4a800e970c2012-12-29T16:22:09Z2012-12-29T16:22:09Zdonnahttp://www.wordpress.comi am totaly agree with you..nice song ..bad singing economiste ..is just a title..mind and work make the profession .....<p>i am totaly agree with you..nice song ..bad singing <br />
economiste ..is just a title..mind and work make the profession ..<br />
because someone say be come economist to make the world better ..<br />
Iam saing WHY THE WORLD is sh...maybe the economic&#39;s mind was not for better but for wors OR maybe they did not learned right the profession ?<br />
who is lier?<br />
inicial ---or simple</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bf12cf970d2012-12-29T16:17:10Z2012-12-29T16:17:10ZDarryl FKA RonTHANKS, buddy. I could have easily and honestly voted all, but I knew that demographic would be well enough covered...<p>THANKS, buddy. I could have easily and honestly voted all, but I knew that demographic would be well enough covered and put it on Republicans in Congress instead. They need to get a message. Democrats are simply overtaken by stupidity and hubrous, while Republicans are much worse than that.</p>
<p>Happy New Year. I am sure there will be many more slap happy returns from inside the Beltway.</p>im1dc commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6befa37970d2012-12-29T15:55:42Z2012-12-29T15:55:42Zim1dcRoger, turn off the TV, put down the remote, pick up the phone and call your provider and cancel your...<p>Roger, turn off the TV, put down the remote, pick up the phone and call your provider and cancel your TV/cable/satellite service.</p>
<p>Stop watching and listening to the Talking Heads, i.e., punditry. Period.</p>
<p>It can be done...I have done it.</p>
<p>Think for yourself.</p>
<p>Do your own digging, do your own analysis, and ratchet up your skepticism and cynicism so you can come to your own conclusions and decisions before someone tells you what they want you to think and believe.</p>im1dc commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bef1c7970d2012-12-29T15:48:38Z2012-12-29T15:48:38Zim1dcThe very latest on the Fiscal Cliff negotiations in D.C. from Jared Bernstein, an honest broker in this affair http://www.huffingtonpost.com/jared-bernstein/fiscal-cliff-the-next-few_b_2380737.html...<p>The very latest on the Fiscal Cliff negotiations in D.C. from Jared Bernstein, an honest broker in this affair</p>
<p><a href="http://www.huffingtonpost.com/jared-bernstein/fiscal-cliff-the-next-few_b_2380737.html" rel="nofollow">http://www.huffingtonpost.com/jared-bernstein/fiscal-cliff-the-next-few_b_2380737.html</a></p>
<p>&quot;Fiscal Cliff: The Next Few Days&quot;</p>
<p>Jared Bernstein...Fmr. Obama administration economist... CNBC and MSNBC contributor</p>
<p>12/29/2012 9:34 am</p>im1dc commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351b883e970b2012-12-29T15:42:21Z2012-12-29T15:42:21Zim1dcNBCNEWS POLL - Who do you blame for the nation teetering on the edge of the fiscal cliff? Go to...<p>NBCNEWS POLL - Who do you blame for the nation teetering on the edge of the fiscal cliff?</p>
<p>Go to Poll, choose your choice, see results.</p>
<p><a href="http://usnews.nbcnews.com/_news/2012/12/29/16216300-do-something-americans-fed-up-with-washington-as-fiscal-cliff-deadline-looms" rel="nofollow">http://usnews.nbcnews.com/_news/2012/12/29/16216300-do-something-americans-fed-up-with-washington-as-fiscal-cliff-deadline-looms</a></p>
<p>&quot;&#39;Do something!&#39; Americans fed up with Washington as fiscal-cliff deadline looms&quot;</p>
<p>By Tracy Connor, NBC News</p>
<p>[POLL]<br />
...&quot;Who do you blame for the nation teetering on the edge of the fiscal cliff?&quot;<br />
=================================================</p>
<p>Republicans are going to take a huge hit for their failure to go along with the DEMS and President Obama.</p>
<p>NB While this Poll is online and not scientific it reflects exactly what professional polling has been showing for the past month, therefore it is safe to assume it is accurate, especially following the November Election results. </p>ken melvin commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bee74c970d2012-12-29T15:40:22Z2012-12-29T15:40:22Zken melvin...nascent entrepreneurs - ... Gotta luvit.<p>...nascent entrepreneurs - ...</p>
<p>Gotta luvit.</p>Peter K. commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bee03d970d2012-12-29T15:34:38Z2012-12-29T15:34:38ZPeter K.http://www.negativeoutlook.blogspot.comNice shout-out to Tim Duy from O'Brien. O'Brien writes: "Bernanke wants Congress to help him, and he's doing everything he...<p>Nice shout-out to Tim Duy from O&#39;Brien. </p>
<p>O&#39;Brien writes: &quot;Bernanke wants Congress to help him, and he&#39;s doing everything he can to let them know.&quot;</p>
<p>This contradicts the title &quot;Ben Bernanke&#39;s Secret Message to Congress: More Stimulus, Please&quot; to an otherwise excellent article.</p>
<p>Bernanke could hold an outdoor press conference somewhere not-so-cold (like Texas or South Carolina) and arrive in a dramatic fashion via helicopter. </p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c351b5bce970b2012-12-29T15:05:46Z2012-12-29T15:05:46ZDarryl FKA RonI can't criticize your taste in music. You must be a gentleman and a scholar.<p>I can&#39;t criticize your taste in music. You must be a gentleman and a scholar.</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bebdf3970d2012-12-29T15:04:07Z2012-12-29T15:04:07ZDarryl FKA RonKeep it up then. Look for similar approaches that might be better still. I suggest the progressive dividends tax credit...<p>Keep it up then. Look for similar approaches that might be better still. I suggest the progressive dividends tax credit as before 1954 with a higher capital gains rate. However, most of the damage of consolidation has been done and it will take a long time to redistribute competition and investment effectively. However, there is a lot of capital getting rolled over in commodity futures and other derivatives now. If that racket gets choked off and the value of the dollar diminished to squeeze our DFI channel, raise oil costs, and push inflation to write off debt, then growth in replacement technologies and import substitution it can work itself out by mid-century or so.</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f4a1b9a970c2012-12-29T14:57:27Z2012-12-29T14:57:27ZDarryl FKA RonEconomists either confuse, conflate, or obfuscate that price is value, and efficiency is effectiveness. After that it really does not...<p>Economists either confuse, conflate, or obfuscate that price is value, and efficiency is effectiveness. After that it really does not matter how you do the math when your most basic assumptions are wrong.</p>Darryl FKA Ron commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6beb361970d2012-12-29T14:55:07Z2012-12-29T14:55:07ZDarryl FKA RonCompetition and cooperation are not mutually exclusive. It's all about the rules of the game and what constitutes winning. It's...<p>Competition and cooperation are not mutually exclusive. It&#39;s all about the rules of the game and what constitutes winning. It&#39;s one thing to be successful and another altogether to consolideate so much wealth and power that you get to write your own rules.</p>Roger Gathman commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f49e1e1970c2012-12-29T14:06:01Z2012-12-29T14:06:01ZRoger Gathmanhttp://www.limitedinc.blogspot.comNice hit piece on the inevitable Glaeser, whose niche in the pundit environment becomes more secure the more he is...<p>Nice hit piece on the inevitable Glaeser, whose niche in the pundit environment becomes more secure the more he is completely wrong. And this is because the pundit environment, which consists mainly of old white guys with a sprinkling of gender diversity (for instance, conservative women) doesn&#39;t give a tinker&#39;s damn. They are a tightly bound up with the plutocrats, and why spit on your easy stipend from the Peterson institute, or the hotel accomodations as you address the Aspen conference on future malarky? In the early sixties, the printers and deliverers of newspapers went on strike in NYC, essentially wiping out delivery of all the major papers of the time. The strike went on for one hundred days. Nobody missed the papers, as AJ Liebling sarcastically pointed out. They have become, since, ever more un-missable. But I suppose you can&#39;t run the lie factory of public life without accredited liars, so, there you go. </p>Fred C. Dobbs commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6be4b4a970d2012-12-29T13:22:31Z2012-12-29T13:22:31ZFred C. Dobbs(Sometimes you have to ruin a city to save a company.) Revival of Hitachi the Company Is a Detriment to...<p>(Sometimes you have to ruin a city to save a company.)</p>
<p>Revival of Hitachi the Company Is a <br />
Detriment to Hitachi the City <a href="http://nyti.ms/Uz53pG" rel="nofollow">http://nyti.ms/Uz53pG</a><br />
NYT - December 28, 2012 - HIROKO TABUCHI<br />
<br />
HITACHI, Japan — The biggest annual loss on record by a Japanese manufacturer jolted executives into action at the Hitachi Corporation, the century-old electronics and engineering behemoth that takes its name from this wind-swept industrial city on the Pacific Coast. </p>
<p>Since its 787 billion yen, or $9.2 billion, loss in 2009, Hitachi has staged an impressive turnaround, booking a record 347 billion yen ($4 billion) in net profit in the year through March 2012, while rivals like Sony, Sharp and Panasonic continue to struggle. </p>
<p>But in Hitachi, a city of 190,00 and the company’s longtime production hub, there is little celebrating. Instead, the deserted streets and shuttered workshops speak of the heavy toll levied by the aggressive streamlining, cost-cutting and offshoring that has underpinned Hitachi’s recovery. </p>
<p>The divergent fortunes of Hitachi and its home city highlight an uncomfortable reality: The bold steps that could revive Japan’s ailing electronics giants are unlikely to bring back the jobs, opportunities and growth that the country desperately needs to revive its economy. </p>
<p>The way forward for Japan’s embattled electronics sector, for now, is a globalization strategy that shifts production and procurement from high-cost Japan to more competitive locations overseas. As Japan’s manufacturing giants become truly global, a country that has so depended on its manufacturers for growth must look to other sources of jobs and opportunity, like its nascent entrepreneurs — a transformation far more easily said than done. </p>
<p>“Closing plants in Japan is a big deal, and we don’t take cutbacks lightly,” Hiroaki Nakanishi, Hitachi’s president and chief executive, said in a year-end interview in Tokyo. “But to return to growth, we have to cut loose what doesn’t bring profit. We have to be decisive.” ...<br />
</p>Fred C. Dobbs commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6be44b0970d2012-12-29T13:16:58Z2012-12-29T13:16:58ZFred C. Dobbs(Merde!) French Panel Overturns 75% Tax on the Very Rich http://nyti.ms/VnjycO PARIS (AP) — Embattled French President Francois Hollande suffered...<p>(Merde!)</p>
<p>French Panel Overturns 75% Tax on the Very Rich <a href="http://nyti.ms/VnjycO" rel="nofollow">http://nyti.ms/VnjycO</a></p>
<p>PARIS (AP) — Embattled French President Francois Hollande suffered a fresh setback Saturday when France&#39;s highest court threw out a plan to tax the ultrawealthy at a 75% rate, saying it was unfair. ...</p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f48c16a970c2012-12-29T09:42:54Z2012-12-29T09:42:54ZMikeEconomist don't even realize that man is better off when we cooperate with each other. They think that man is...<p>Economist don&#39;t even realize that man is better off when we cooperate with each other. They think that man is better off when we compete with each other. </p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3f48bebf970c2012-12-29T09:40:36Z2012-12-29T09:40:36ZMikeEconomists are unable to understand the universe and mankind, yet they try guide mankind. Economist, do not even understand man,...<p>Economists are unable to understand the universe and mankind, yet they try guide mankind.</p>
<p>Economist, do not even understand man, yet they try to control man. </p>
<p><a href="http://www.youtube.com/watch?v=dGenk99YDwY" rel="nofollow">http://www.youtube.com/watch?v=dGenk99YDwY</a></p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c3519cd59970b2012-12-29T09:02:00Z2012-12-29T09:02:00ZMikeI will leave you with Alvin Lee. http://www.youtube.com/watch?v=_1ODuT00Q6s<p>I will leave you with Alvin Lee. <br />
<a href="http://www.youtube.com/watch?v=_1ODuT00Q6s" rel="nofollow">http://www.youtube.com/watch?v=_1ODuT00Q6s</a><br />
</p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee6bd2dc8970d2012-12-29T08:54:53Z2012-12-29T08:54:53ZMikeI have been arguing for a progressive base capital tax for awhile.<p>I have been arguing for a progressive base capital tax for awhile. </p>Mike commented on 'Links for 12-29-2012'tag:typepad.com,2003:6a00d83451b33869e2017c3519b5bf970b2012-12-29T08:41:21Z2012-12-29T08:41:21ZMikeWhy are economists barren of human emotion? Humans value fairness. They do not have well defined utility functions that operate...<p>Why are economists barren of human emotion? Humans value fairness. They do not have well defined utility functions that operate in space. </p>
<p>The reason why I studied economics is that I wanted to make the world a better place.</p>
<p>As I studied economics, economists don&#39;t care about making the world a better place.</p>
<p>While I teach economics, I only teach the analytical skills. This idea of using economics to make the world a better place is wrong. I still don&#39;t fully understand this reason.</p>
<p>I still don&#39;t fully understand this reason why economist cannot make the world a better place. It seems so illogical to me, but then again I delve into the science of illogical behavior. </p>